Law Enforcement and Economic Growth

• Author: Bernard Nainggolan
• Position: Faculaty of Law, Universitas Kristen Indonesia, Jakarta 13630, Indonesia
• Pages: 37-43

37

Balkan Journal of Interdisciplinary Research

IIPCCL Publishing, Graz-Austria

ISSN 2410-759X

Acces online at www.iipccl.org

Vol. 6 No.1

May, 2020

Law Enforcement and Economic Growth

Bernard Nainggolan

Faculaty of Law, Universitas Kristen Indonesia

Jakarta 13630, Indonesia

Abstract

One aspect of infrastructure development by the government in order to spur economic growth

is law product publication. Classical economic theory states, later updated by Johan Maynard

Keyness (1883–1946), that full empoyment will occur if the government involves in market.

This research aims to investigate the association between law product, that is Law mandates of

equal remuneration for females and males for work of equal value, with economic growth. The

data used in this study came from the World Development Indicators of the World Bank for

183 countries during 2012–2016. The dependent variable is the GDP per capita (current US$).

Meanwhile, the independent variables include mineral rents (% of GDP), access to clean fuels

and technologies for cooking (% of population), and Law mandates equal remuneration for

females and males for work of equal value. The data were analysed bivariately using sca er

diagram and multivariately using a fi xed e ects model for panel data.

The bivariate analysis results show that the higher the mineral rents and access to clean fuels

and technologies for cooking, the higher the economic growth, and, on average, economic

growth is higher in countries where Law mandates equal remuneration for females and males

for work of equal value.

Meanwhile, the results of multivariate analysis show that, a er controlling for the e ects of

other factors, higher economic growth are siginfi cantly and statistically associated with high

mineral rents and access to clean fuels and technologies for cooking and with Law mandates

equal remuneration for females and males for work of equal value. Other things being the

same, on average, GDP per capita is higher US$9,395.10 in countries with Law mandates equal

remuneration for females and males for work of equal value than in countries with no such

Law. In addition, an increase of 1% of GDP in mineral rents and 1% in access to clean fuels and

technologies for cooking will increase GDP by US$ 345.45 and US$ 282.53 respectively.

Keywords: Law Enforcement, Government, Public goods, Economic growth.

Introduction

John Maynard Keynes (1883-1946), a British economist and civil servant

(Skidelsky,2015;Barron, John M., et al,2006), developed a branch of Economy, later

called macroeconomics, remodeled classical economic theory that statescompetitive

market economy always guaranteesfull employment. Keynes says that government

intervention is needed to ensure full employment. One of government roles is to

develop law. Law is a key factor for stable and expanded economic growth (Hasani,

2016). Law creates employment opportunity and supports welfare development.

The rule of law drives countries to become democratic. Democracy can positively

infl uence the role of law and play important role in economic growth. Democratization

and law rule foster economic growth in Albania (Hasani, 2016). Meanwhile, Philipsen

and Guangdong Xu (2014) explored law rule and regulation in maintaining fi nancial